How to Communicate Software Development Costs to Your Finance Department

If you’re in engineering or development, communicating about cloud infrastructure and other software development costs with your finance department is tricky. For one thing, those costs are almost certainly rising.

Also, you are in different roles with different priorities. This naturally creates barriers of communication. You may think your development costs are perfectly reasonable while your CFO thinks there’s a problem – or you may be focused on different parts of the bill than your colleagues in finance are.

Here are some ways to break down that communication barrier and make your software development costs sound a little less scary.

Use the CFO’s Language

Engineering and finance use different language to talk about the same things – which means there’s going to be an element of translation involved. Before meeting with someone who lives in a different day-to-day world than you do, consider how they may talk about cost areas in a way that’s meaningful to their role. For example:

  • Dev-speak: “Non-production workloads” – or dev or test or stage
  • Finance-speak: R&D costs
  • Dev-speak: “Production workloads”
  • Finance-speak: Cost of goods sold or COGS

Focus on Business Growth Impact

So your software development costs are probably going up. There will be some wasted spend that can be eliminated, but for the most part, this growth is unavoidable for a growing business. Highlight the end results that drove decisions to increase spending on software development, for example:

  • We increased our headcount and sprint velocity to speed time to market and beat our competition for offering A.
  • We are developing multiple applications in parallel.
  • Our user base is growing, which is increasing our infrastructure costs.
  • Our open bug count is down by 50% YOY, increasing customer satisfaction and retention.

Know the Details, But Don’t Get Bogged Down in Them

Are your S3 costs surging? Did you just commit to a bunch of 3-year reserved instances upfront (wait –– did you really?) Did your average salary per developer increase due to specialized skill requirements, or by moving outsourced QA in-house?

You should know the answers to all of these questions, but there’s no need to lead with them in a conversation. Use them as supporting information to answer questions, but not the headline.

Share Your Cost Control Plans – and Automate

Everybody likes an action plan. Identify the areas where you can reduce costs.

  • Consider roles where outsourcing may be prudent – such as apps outside your core offering
  • Automate QA testing – You’re not going to replace human software developers with bots (yet), but there are a few areas where automation can reduce costs, such as QA testing.
  • Optimize your existing infrastructure to turn off when not needed, and size resources to match demand based on utilization metrics, automatically
  • Reduce other wasted infrastructure spend by decommissioning legacy systems,

Like many things in business, effective communication and collaboration can go a long way. While it’s important to optimize costs to make your software development costs go the furthest, they are going to continue to rise. And that’s okay.

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Author: Katy Stalcup

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